The US wheat market has increased by $4/tonne due to the weaker dollar and the less than ideal wheat crop conditions in the States. Also the continuing problems with the wheat crop in the Argentine is putting upward pressure on prices. After frosts compounded a drought, the Argentine wheat crop is now seen at just 11.8m/ tonnes by the Rosario Grain Exchange, with average yields the lowest since the drought-stricken 2008/09 season. As well as this the mild spring conditions have delayed the start of the harvest in Western Australia, but have driven expectations for another record year of production in the State.
Talks over the extension of the Ukrainian grain export corridor have finally come to a conclusion this week, with a straight extension for a further 120 days following the end of the current deal tomorrow (19/11/22). No additional terms or limitations have been added. USDA’s Foreign Agricultural Service has estimated that wheat exports from Ukraine will reach 12.4m/tonnes as opposed to the official estimate of 11m/tonnes. Overall Ukraine’s agriculture ministry says grain exports from the country have reached 15.1m/tonnes so far this season, down 31% year on year with 5.7m/ tonnes of wheat, 1.2m/tonnes of barley and 8.1m/tonnes of corn shipments included in the total.
EU prices sharply lower
EU prices are sharply lower on the week, down €9/tonne over the past week, pressured by more aggressive Russian offers and the likelihood that the Ukrainian grain export corridor will be extended. Also UK prices have plunged £14/tonne, following the weaker EU trend and pressured by a firmer pound, as the BoE policy and inflation hitting a 41-year high pointed to an uneasy future ahead of the chancellor’s Autumn statement.
